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Owensboro Health Facilities, L.P. v. Canary

United States District Court, W.D. Kentucky, Owensboro Division

March 15, 2017

OWENSBORO HEALTH FACILITIES, L.P. d/b/a TWIN RIVERS NURSING AND REHABILITATION CENTER, et al PLAINTIFFS
v.
BRUCE CANARY AND SUE BOEMAN, AS CO-ADMINISTRATORS OF THE ESTATE OF HELEN CANARY, DECEASED DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          JOSEPH H. MCKINLEY, JR. CHIEF JUDGE

         This matter is before the Court on Plaintiffs Owensboro Health Facilities, L.P., d/b/a Twin Rivers Nursing and Rehabilitation Center, Preferred Care Partners Management Group, L.P., Preferred Care of Delaware, Inc., d/b/a Preferred Care, Inc., and Kentucky Partners Management, LLC's (“Plaintiffs”) motion to compel arbitration and enjoin Defendants [DN 5], and the motion by Defendants Bruce Canary and Sue Boeman, as co-administrators of the estate of Helen Canary, to dismiss [DN 10]. Fully briefed, these matters are ripe for decision.

         I. Background

         Helen Canary was a resident of Twin Rivers Nursing and Rehabilitation Center (“Twin Rivers”) from February 9, 2013, until August 3, 2015. On May 6, 2009, well before Canary was a resident at Twin Rivers, she executed a “Durable General Power of Attorney” in which she named her daughter, Betty Greenwell, as her attorney-in-fact. [DN 1-3]. This power of attorney granted Greenwell the power to

execute, acknowledge, seal, and deliver any deeds, mortgages, leases, contracts, liens, releases or other instruments in any form my attorney-in-fact deems proper . . . to file, prosecute, enforce, defend, answer or oppose all legal proceedings in any matter in which I have any interest or concern; to compromise or engage in any kind of alternative dispute resolution regarding any matter . . .

(Durable General Power of Attorney [DN 1-3] ¶¶ 4-5) (subdivisions omitted). With this power of attorney, Greenwell (now named Betty Hatfield [DN 1-4]) executed the paperwork for Canary upon her admission to Twin Rivers on February 9, 2013.

         Included with Canary's admission paperwork was a form titled “Alternative Dispute Resolution Agreement - Kentucky” (“ADR Agreement”). [DN 1-1]. Under the title, the form states in bold text and capital letters, “Signing this agreement is not a condition of admission to or continued residence in the center.” The form states, in pertinent part, that

[t]he Parties voluntarily agree that any disputes covered by this Agreement . . . that may arise between the Parties shall be resolved exclusively by an ADR process that shall include mediation and, where mediation does not successfully resolve the dispute, binding arbitration. . . .
This Agreement applies to any and all disputes arising out of or in any way relating to this Agreement or to the Resident's stay at the Center that would constitute a legally cognizable cause of action in a court of law sitting in the Commonwealth of Kentucky and shall include, but not be limited to . . . tort; breach of contract; fraud; misrepresentation; negligence; gross negligence; malpractice; death or wrongful death and any alleged departure from any applicable federal state, or local medical, health care, consumer or safety standard. Covered Dispute shall include the determination of the scope of or applicability of this Agreement to mediate/arbitrate.

(ADR Agreement [DN 1-1] ¶¶ 3-4).

         On November 30, 2016, the Defendants filed an action in Daviess Circuit Court against the Plaintiffs in this case, as well as two administrators at Twin Rivers and three unknown defendants. [DN 1-2]. This action asserts claims of negligence, medical negligence, corporate negligence, a violation of long-term care resident's rights, and wrongful death. The Plaintiffs then filed the present action, seeking enforcement of the ADR Agreement [DN 1], and they subsequently filed a motion to compel arbitration and enjoin the Defendants. [DN 5]. The Defendants have filed a motion to dismiss the present action. [DN 10].

         II. Discussion

         A. Motion to Dismiss

         The Court begins with the Defendants' motion to dismiss. The motion makes numerous arguments in favor of dismissal, but all of the asserted grounds for dismissal have been raised by defense counsel in other cases before this Court and others, and they have been denied by the courts in those cases. E.g., Owensboro Health Facilities, L.P. v. Henderson, 2016 WL 2853569 (W.D. Ky. May 12, 2016); GGNSC ...


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